Condo hotels emerge as a high-profit, safe and open investment alternative for different types of investors. They can invest from experienced investors or businessmen who are looking for innovative investment alternatives to expand their capital, to vacation savers who want to invest their savings at at the same time that they want to have their own vacation destination to enjoy.
Real estate investors own the individual units (residences, apartments or hotel rooms), but these are rented through the hotel management company when not occupied by the owners.
Unlike timeshares; In Condohotels, each unit is privately owned with registered property title and enjoys the rights of a condominium regime.
It is a business model primarily for investors who want a vacation property, but without the usual inconveniences of a second home, for example, paying security, constant maintenance, finding someone to rent it during the low season or promoting the property for rental.
Here are some key features:
Individually Owned Units: Each condohotel unit is privately owned and can be purchased by individuals. These owners have the right to use their unit according to the agreed terms, whether to live in it, rent it on their own, or include it in the condo hotel management program.
Operation as a hotel: The condohotel is managed and operated as a hotel, offering services and amenities typical of a hotel establishment, such as reception, cleaning, security, maintenance, amenities such as swimming pools, restaurants, spas, among others.
Rental Programs: Owners have the option to put their units on a rental program managed by the hotel. In this case, the hotel is responsible for renting the unit when the owner is not using it, dividing the income with the owner according to the terms of the contract.
Flexibility of use: Owners may have some flexibility to use their unit whenever they wish, but this flexibility may vary depending on the agreement with the hotel.
The units must maintain a high quality standard for all rooms, in order to maintain the hotel category; Therefore, each unit (apartment/residence) must be in perfect condition.
Characteristics of a successful Real Estate Investment.
Invest in strong and growing markets: The Riviera Maya located in the state of Quintana Roo, Mexico, is considered one of the destinations with the greatest economic growth internationally due to the tourism sector, therefore, investing in a condohotel also allows owners to venture into this sector.
Excellent location: One of the main interests of tourists is that their destination for rest and comfort is well located and surrounded by nearby communication and transportation routes, as well as shopping centers, entertainment centers, recreational and sports activities. In this way, greater occupancy and a profitable return on your investment (ROI) are generated.
Capital Gain: The day you sell your property you will have the appreciation of the asset. That is, the difference between the value at which you bought it in relation to the value at which you sold it. That is why a good opportunity is to acquire properties at a discount in the early stages of construction, known as pre-sales. In these opportunities, profitability is increased because you obtain benefits from the discount obtained + the capital gain of the property from the purchase to the sale. A price increase that in the Riviera Maya has been greater than 10% annually in recent periods.
